Yass Valley Council considering rate hikes to help fix budget black hole

ABC NEWS (Australia)

Interest rates may have been cut but with local council rates soaring across the country that may come as little relief to homeowners. Local government have not been immune to cost-of-living pressures and may have been forced to increase their rates as they struggle with worsening financial challenges.

Transcript

00:00I don't know what we'll give up but we'll work it out somehow because it has to be paid

00:08because we'll be homeless otherwise.

00:10When retirees Anne and John Gallagher received their council rates in the mail they were

00:15faced with the prospect of foregoing home repairs to pay them.

00:19Well considering we're pensioners still paying a mortgage it's not a good look, a bit worrying

00:24in fact.

00:25We're actually thinking of getting a reverse mortgage.

00:27Balancing their household budget would get harder for these residents of Yass, an hour's

00:31drive from the nation's capital, if the council increased its rates.

00:35You're chasing a tail all the time, and apart from that the local amenities are not up for

00:47scratch.

00:48It's an option the Yass Valley Council is being forced to consider as it looks to get

00:51itself out of millions of dollars of debt.

00:54I think a lot of rural councils would find themselves in the same situation.

00:58So I think what we need to do now is accept we are where we are and we've got a team that

01:03are ready to do the work.

01:05Council rate rises are affecting homeowners across the country as local governments continue

01:10to grapple with worsening staffing and financial challenges.

01:14The key thing that councils are facing at the moment is that construction costs have

01:18really surged over the past few years and for local government the biggest part of their

01:23bills is generally on upgrading, maintaining and building infrastructure.

01:30Over the past two years, dozens of councils have passed on massive rate increases.

01:35Among them, Strathfield Municipal Council by 93% over four years, Queenbeyan-Palaurang

01:41Regional Council by more than 64% across three years and Armadale Regional Council by close

01:48to 59% over three years.

01:51It's an issue disproportionately affecting people in rural Australia where local councils

01:56have fewer ratepayers.

01:57When a regional council is under financial pressure, they either have the opportunity

02:01to raise rates or cut the services that they provide to the community.

02:09And as we've seen, regional communities often are already paying more in rates per person

02:14than their counterparts in major cities.

02:17So increases in rates may simply be unaffordable.

02:20But councils are often left with few options.

02:23The Yass Valley Council has promised not to increase rates this year and is exploring

02:27other ways to rein in its ballooning deficit.

02:30It's something that I believe can be turned around through a number of mechanisms.

02:37For this year what we're doing is looking at some efficiencies.

02:40The Mayor blames the financial troubles on a reduction in federal government support.

02:44The federal government has an obligation to rural councils to reinstate the federal assistant

02:49grants to its 1% level.

02:50That would wipe out our current deficit.

02:53The Federal Minister for Local Government, Christy McBain, did not address restoring

02:57the grant but said the Commonwealth was delivering significant increases to funding to strengthen

03:01the capacity of the sector.

03:02For Yass residents, finger pointing doesn't make the prospect of a rate increase any easier

03:08to bear.

03:09I'm particularly concerned that they're just raising more money to make the same mistakes

03:13because there's been a total lack of transparency about how we got in this mess.

03:19Prices are increasing everywhere, building wages, everything's increasing so I think

03:26that it's not to be unexpected.

03:29From Martin Place to Main Street, interest in rates has never been higher.

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